The Tennessee Technological University last year returned nearly $200,000 in student federal loans because too many people who took student loans dropped out, a new state audit says.
For the second consecutive year, the office of state Comptroller Justin Wilson has called out the Cookeville-based TTU for awarding loans to students ill-suited for college.
The more loans given the more taxpayers pay for universities, which also must hire more people to process the loans.
The U.S. Department of Education, which awards the loans, doesn’t demand any sort of risk analysis or credit check, said Jane Pennington, spokeswoman for the Tennessee Student Assistance Corporation, which oversees student loans in the state.
“It is true that student loans are very easy to get,” Pennington said in an emailed statement.
“The reason is that schools have very little flexibility in controlling the loan amount due to statutory and regulatory restrictions. Schools must follow federal guidelines.”
TTU returned $192,588 to the feds because of dropouts during the fall 2014 and spring 2015 semesters.
TTU officials didn’t return an additional $4,775 because of what school officials said was “an oversight,” according to Wilson’s audit.
TTU spokeswoman Karen Lykins wouldn’t say how many students dropped out.
Lykins told Tennessee Watchdog in an email TTU has five employees to process student loans; they processed $36 million from the state and the feds last year.
TTU’s graduation rate was 58.5 percent, an improvement over the previous year’s rate of 51 percent, she said.
Three years ago, several MTSU students told Tennessee Watchdog student loans were “scary easy” to get.
The U.S. government made $50 billion off student loans in 2012, according to the U.S. Congressional Budget Office.
Tennessee Tech has 10,314 students, and nearly two-thirds get financial aid, according to U.S. News & World Report.
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